Death comes to us all. Life's but a walking shadow | I agree with you but that still leaves the question unanswered. Somebody, somehow came to the conclusion that $3.60 is an appropriate price for corn. Maybe it was Fund Managers or day traders or whomever but they still believe strongly enough to buy more of it when the price falls below $3.60 and sell more when it rises above $3.60. I'm trying to figure out why they collectively feel that $3.60 is the right price. After all, if it is just random they could choose any price between zero and whatever.
Am I foolish to believe that there must be some rational behind the current price?
For instance, I posted a graph the other day showing the price vs. % stocks to use. But it can't be correct because if next year's %stocks to use is really 13.2% then the price should be much lower. In fact if you extrapolate the '13/'14 line the price should be zero. One interpretation of the chart is that either somebody(s) values corn enough to buy the futures at more-than-some very low number or they believe that the stock will be lower (or use higher) than currently expected.
Edited by 1234 8/29/2014 21:03
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Who sets the price of corn?
